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News » U.S. staffing revenue to drop 10% in 2024: SIA

U.S. staffing revenue to drop 10% in 2024: SIA

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CALIFORNIA, UNITED STATES—The revenue of the United States (U.S.) staffing industry is anticipated to fall by 10% in 2024, reducing the market size to $189.0 billion. 

This projection, reported by Staffing Industry Analysts (SIA), marks a significant downturn from the 3% decline anticipated earlier in March. 

Despite the bleak outlook for this year, the industry is expected to rebound and return to growth in 2025.

Key factors behind the decline

SIA’s US Staffing Industry Forecast: September 2024 Update outlined several factors that are contributing to this year’s projected revenue decline. This includes:

  • Widespread client caution: Companies are delaying projects and exercising restraint in hiring due to economic uncertainties.
  • Depressed manufacturing sector: Slower production rates and decreased demand have led to reduced staffing needs.
  • Falling bill rates in healthcare: Declining bill rates are squeezing profitability for staffing firms in critical sectors like healthcare.
  • Shift towards permanent positions: Both employers and workers are increasingly favoring permanent roles over temporary positions, impacting demand for temporary staffing solutions.

Healthcare staffing hit hardest

The healthcare segment is experiencing some of the most significant declines. Travel nurse staffing is forecasted to see a dramatic 30% revenue drop. 

Similarly, per diem nursing revenue—or the revenue from temporary nurses who work on an as-needed basis — is expected to decrease by 11%. Allied healthcare staffing is also projected to drop by 18%. 

These declines reflect broader changes within the healthcare industry, where cost pressures and regulatory shifts are prompting a preference for permanent staffing solutions.

Broader industry impact

Beyond healthcare, other sectors are also facing declines. IT staffing revenue is projected to fall by 7%, while commercial staffing — including office/clerical and industrial roles — is expected to see a 9% reduction. 

These challenges highlight the need for staffing firms to adapt quickly to changing market conditions.

Opportunities amidst challenges

Despite the overall downturn, certain segments are projected to grow in 2024. Locum tenens staffing, where healthcare professionals are hired on a short-term basis, is expected to increase by 12%, driven by demand for temporary physicians in underserved areas. 

Education staffing is set to rise by 10%, fueled by ongoing needs for substitute teachers and support staff. 

Additionally, engineering will see a modest 3% growth, likely due to continued investment in infrastructure projects.

Strategic responses for staffing firms

To navigate these challenges, outsourcing and recruitment provider QX Global Group noted that staffing firms should consider several strategic approaches:

  • Diversify services: Shifting focus towards growth segments like education and locum tenens can offset declines in other areas.
  • Enhance operational efficiency: Streamlining processes and automating tasks can help firms reduce costs and remain competitive.
  • Leverage data insights: Utilizing market data can guide firms in identifying new opportunities and making informed decisions.
  • Strengthen client relationships: Maintaining strong communication with clients can foster long-term partnerships and uncover new business opportunities.

Looking forward

While the anticipated 10% decline presents immediate challenges for the U.S. staffing industry, the forecasted return to growth in 2025 offers a glimmer of hope. 

Firms that successfully adapt their strategies and capitalize on emerging opportunities will be well-positioned to thrive in a more competitive future landscape.

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